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Deuel County Housing
AssessmentLet’s take a look at housing in Deuel County and unlock the details together.
Data Analysis + Observations + Insights by Deuel Area Development & the Rural Learning Center
affordability
renters
homes for sale
infrastructure
quality of life
movers building permits
projections
Housing Road Map
key learnings
Survey overview
61% Return Rate
696 Surveys Distributed, 428 Returned
Businesses & organizations surveyed:Good Samaritan Society, Technical Ordinance, Deuel School, EMPI, ITC, Supreme MMT/ Pork Sanford Deuel County Hospital, H-D Electric, EMS, Deuel County National BankAmerican Family Insurance, Ardy’s Bakery, Aunt Sally’s Attic, Birdie’s Beauty Nest, Cenex C-Store, City of Clear Lake, City of Gary, Clear Lake Building Center, Clear Lake Chiropractic, Clear Lake Courier, Clear Lake Vet Clinic, Conservation Office, Deuel County,Deuel County Abstract Company, Deuel County Cenex, Deuel County Extension, Deuel County Hwy Department, Deuel County Pharmacy,Fritz Chevrolet, FSA Office, Gunderson Law Office, Hall’s Machine, Joyce’s, Kathy’s Corner, Kids In Motion,Lundberg Electric, Maynards, Mel’s Hardware, Melvees, Midwest Converter, Olson DDS, Pizza Shack, Post Office, Pronto Auto Parts, Swenson Ford, The Cowboy, The Lanes, Wells Fargo
survey overview
Here’s a few things that we learned about housing in Deuel County…
We’ll go through the main conclusions of the study first, and then provide all the details so you can see just how we got there.
So, let’s get started!...
Survey conclusions
key learnings
Healthy Housing Market
key learnings
#1We have a healthy housing market in Deuel County.
• Healthy number of home sales• Healthy turn-over in the market
Why is there a perception that we have a challenge with housing? • Is it that we don’t have enough of a specific type of housing?• Are our expectations higher than we can afford?
1. What people believe to be affordable housing:Less than $100,000. $60,000 – $80,000 had the highest response.
2. Average cost of a modest new construction ranch style home: $135/sq. ft. ($190,000 for 1400sq. ft. home)
There is a gap between the cost of new construction and
what people consider to be affordable. This gives great
potential to a purchase-rehab-resell program.
The Affordability Reality
key learnings
#2
This gap between new construction and affordable home prices raises
the question of whether new home construction is the best solution for affordable housing in Deuel?
There are a few other options for affordable housing that may fit well with our needs and our local housing market…
What is the Best Solution for Affordable Housing?
key learnings
With a Purchase – Rehab – Resell Program.
The data shows that there are very affordable homes selling on the
market. Let’s investigate how these very affordable homes (that are likely in need of repair)
can provide a housing solution that people
with low- to moderate- income can afford.
Let’s Get Resourceful
key learnings
#3
Many people cannot afford a Down Payment. They either have other significant debt, or don’t have enough savings built up.
So…what can we do to help? Here are some recommendations…
Down Payments are an Obstacle
key learnings
#4
Affordability Assistance Programs
On the surface, homes seem to be selling in an affordable range. Other issues that might need to be addressed to create more homeownership:
• Down Payment Assistance• Mutual Self-Help ‘Sweat Equity’ Housing• Gap Financing • Weatherization
key learnings
Affordability Assistance Programs: Down Payment Assistance Programs
Employee Mortgage Assistance Program• Down Payment help from employer to employee.• Lump sum / Forgivable loan from the employer, or• CD pledge (bank loans money as CD security, equity to
borrower, when CD matures bank gets investment back)
Dakota Dreams Savings FundThis ICAP fund will match 2-to-1 savings for income eligible
families to contribute towards a home purchase.
key learnings
Affordability Assistance Programs: Self-Help Mutual Housing
Self-Help Mutual Housing a.k.a. ‘Sweat Equity’ housing is a program offered through ICAP and USDA Rural Development to get income eligible families into home ownership.
• 3 local qualified income eligible families needed for a project.• Families work together to build their homes.• Contractor hired through ICAP to supervise the project and teach homeowners
skills needed to build their homes.• Virtually no labor costs results in savings on new home construction.• Nice homes. In recent project in Brookings, homes appraised for $135,000 and
cost home owner approximately $95,000.
key learnings
Affordability Assistance Programs:Gap Financing
Gap Financing for homebuyers is something to consider.Gap financing is an interim loan to finance the difference between what the lender is willing to
provide and the total financing needed for the homebuyer to purchase the home.
Examples of Gap financing– 0% loan– Deferred payment– No payback until lender’s mortgage repayment is fulfilled
Reasons why gap financing may be helpful for a homebuyer:• Not enough access to financing• Bad credit• Can’t afford a down payment
However, given the current economic times, it is not the greatest time for gap financing. key learnings
Affordability Assistance Programs: Weatherization & Energy Audits
Energy Audits. Some local electric co-ops may offer free advice for increased / improved energy efficiency, known as an energy audit.
We could potentially conduct an energy audit on the more affordable homes for sale on the market and identify energy efficiency measures prior to the sale. This may be a tool to increase sales and make homes on the market more attractive to potential buyers. The audit may also point out grant resources available for weatherization.
key learnings
Turn Faces into Neighbors
key learnings
Let’s satisfy people who are already here, rather than focusing completely on people attraction.
What would make you want to stay?How can our organizations help in
retaining people?
#5
Retaining Residents... Defined.The University of Nebraska Lincoln recently did a study on important
tactics in retaining new residents, and found the following
#1. Open-minded community attitude toward new residents / new ideas
#2. Individual job and career enhancement
#3. Clear, positive community vision
#4. Opportunities to participate in community#5. New resident networking opportunities#6. Opportunities for leadership development#7. Community social functions
key learnings
Self-investment. Our Community needs to decide to invest in itself. Why would anyone invest in us if we aren’t?
There is no free money $$.
Take this information and do your best to serve your community with it.
key learnings
#6 Invest in Yourself First
affordability
renters
homes for sale
infrastructure
quality of life
movers building permits
projections
Housing Road Map
key learnings
What those surveyed believe to be an affordable home
Under $60,000 $60,000-80,000 $80,000-100,000 $100,000-120,000
$120,000+0%
5%
10%
15%
20%
25%
% o
f Sur
veye
d
Prices of Homes
affordability
Income ranges
Survey options for Annual Household Income:
Less than $10,000 $40,000-49,999$10,000-19,999 $50,000-90,000$20,000-29,999 $90,000+$30,000-39,999
The midpoint of each range was used to calculate the following slides.
affordability
$233 $350 $583 $816 $1,050 $1,750 $2,100 0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Monthly Housing Pay-ment
*$25
,000
*$35
,000
*$45
,000
*$75
,000
*$90
,000
Monthly Housing Payment**
*$10
,000
*Annual Household Income
% o
f Sur
veye
d
affordability
An affordable monthly housing payment calculated from Annual Household Income (including taxes & insurance)
*$15
,000
**MHP Based on 28% of Annual Household Income
Comparison of calculated and actual housing monthly payments
$10,000 $15,000 $25,000 $35,000 $45,000 $75,000 $90,000 $0
$500
$1,000
$1,500
$2,000
$2,500
CalculatedActual
Mon
thly
Hou
sing
Pay
men
t*
Annual Household Income
affordability
*MHP Based on 28% of Annual Household Income
Why is the calculated affordable payment higher than the actual housing payment??
? affordability
This could mean:• People could pay more…or, possibly they have
other debt.• If they had no other significant debt, the blue bar is
what they could afford.• Debt load changes what an individual has available
to pay for housing costs.
How does debt in South Dakota compare to the nation?
According to Money Central on msn.com…
43% of American families spend more than they earn each year.
The national average of household debt is $11,224 per household, not including mortgage debt.
The average personal debt of a South Dakotan is
$6,638.
Income of those hoping to build or purchase a home within the next two years
$15,000 $25,000 $35,000 $45,000 $75,000 $90,000+0%
5%
10%
15%
20%
25%
30%
35%
1
12
8
6
16
7
affordability
% o
f Tho
se H
opin
g to
Bui
ld o
r Pur
chas
e
Annual Household Income
…And the cost of a home they can afford based on their income (cost of home calculated)
$16,000 $57,000 $98,000 $222,000 $280,000 0
2
4
6
8
10
12
14
16
18
7
16
6
8
12
Price of House
Num
ber o
f Hou
ses
Nee
ded
affordability
…And the down payment they can afford
None Under $2,500 $3,750 $6,250 $10,000+0%
5%
10%
15%
20%
25%
30%
Down Payment
affordability
% o
f Tho
se H
opin
g to
Bui
ld o
r Pur
chas
e
Is there something we can do about the down payment affordability challenge?
affordability?25% of people can’t afford a down payment.
This could mean:• A down payment assistance program may be
needed to encourage families to purchase a home in Deuel County.
• To help with down payment and closing costs, we could create, in conjunction with area employers, an Employer Mortgage Assistance Program.
affordability
renters
homes for sale
infrastructure
quality of life
movers building permits
projections
Housing Road Map
key learnings
The survey showed 90 current renters, and this is the type of rental housing they live in.
House Apt/Comp Senior Liv Apt Mobile Home Townhouse0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
42
4
14
27
3
% o
f Tho
se w
ho C
urre
ntly
Ren
t
renters
Type of Rental Housing
Of the 90 current renters, 34 hope to move to…
Clear Lake Acreage in Deuel Other Rural Town Out of Deuel0%
10%
20%
30%
40%
50%
60%
17
9
6 6
renters
% o
f 34
Curr
ent R
ente
rs W
ho H
ope
to M
ove
Hope to Move Location
Current renters who hope to build or purchase a home within the next 2 years
15 hope to own a home within 2 years.
12 hope this home will be in Deuel County.- - This is good retention!! - - Affordability is important.
renters
59% of renters plan to move to one of the following rental units within 2 years.
House Apt/Complex Townhouse Mobile Home Sr Living Apt0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2120
10
1 1
renters
Rental Preference
% o
f Cur
rent
Ren
ters
Who
Hop
e to
Con
tinue
Ren
ting
affordability
renters
homes for sale
infrastructure
quality of life
movers building permits
projections
Housing Road Map
key learnings
Of the 428 people surveyed, 84 hope to move to…
Clear Lake Out of Deuel Acreage in Deuel Other Rural Town0%
5%
10%
15%
20%
25%
30%
35%
24 24
21
9
movers
Hope to Move Location
% o
f Tho
se S
urve
yed
Who
Hop
e to
Mov
e
What does the desire for acreages mean to our cities?
• Everyone wants their own piece of heaven in rural Deuel County
• Quality of life is important• Land use planning is important• Can we incorporate acreages into the outskirts of
city limits?• Homes on the outskirts of town could be laid out
far enough from each other that gives the illusion of larger space.
• Acreages results of loss of tax income for cities, but is good for the county.? movers
Of those hoping to move, 24 hope to move out of Deuel County. They currently live in…
Clear Lake Acreage in Deuel Other Rural Town0%
10%
20%
30%
40%
50%
60%
70%
80%
16
3 3
movers
% o
f Tho
se S
urve
yed
Who
Hop
e to
Mov
e
Current Residence Location
What can we do about Clear Lake outflow?
movers?3x the number of people want to leave Clear Lake
than move into Clear Lake.
This could mean:• People retention is key• Quality of life is key• Is housing really the most significant priority in
Clear Lake?
Of the commuters, 11 hope to move to the following Deuel County locations.
Clear Lake Other Rural Town Acreage In Deuel0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
5
4
2
movers
Current Residence Location
% o
f Com
mut
ers
Who
Hop
e to
Mov
e
Those hoping to move to Clear Lake are interested in the following types of homes.
Move Up Home Starter Home0%
10%
20%
30%
40%
50%
60%
7
9
movers
% o
f Tho
se W
ho H
ope
to M
ove
to C
lear
Lak
e
Type of Home
All make below $90,000 per year. 60% make less than $50,000 per year.
affordability
renters
homes for sale
infrastructure
quality of life
movers building permits
projections
Housing Road Map
key learnings
Here are the Clear Lake building permits from 2007 – 2008.
New Home
New Building
Fence
Addition
Curb &
Gutter
Deck/P
atio/Porch
Shed/Barn
Driveway/Sidewalk/B
asement
GarageOther
0
2
4
6
8
10
12
21
5
8
4
6
34
2 2
11
67
6
87
6
10
20072008
building permits
What’s happening with building in Clear Lake?
building permits
?Questions to Consider:• What is limiting people from building new homes?• How can we encourage development?• Fences are popular!
• The ‘Other’ Category includes: concrete pad, demolition of building, sign, storefront remodel, wheelchair ramp, variance, roof, and track.
affordability
renters
homes for sale
infrastructure
quality of life
movers building permits
projections
Housing Road Map
key learnings
What are the top 5 reasons you choose to live in Clear Lake?
Job Small Size/Rural
Hometown Always Lived Here
Low Cost of Living
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
RentOwnCommute
quality of life
% o
f Tho
se W
ho R
espo
nded
The reasons why people choose to live Clear Lake… The expanded version
Job
Schools
Clean
Sense of Community
Always L
ived Here
Low Crim
e
Friendly
Hometown
Church
Quality of L
ife
Quietness
Low Cost
of Living
Small Size
/Rural
0%10%20%30%40%50%60%70%80%90%
100%
RentOwnCommute
quality of life
% o
f Tho
se W
ho R
espo
nded
Interesting observations.
quality of life
...
• ‘Friendliness’ was chosen by more renters than owners.
• Many people have always lived here.• ‘Quietness’ was chosen by more renters than
owners. • Small size / Rural is important to everyone.
affordability
renters
homes for sale
infrastructure
quality of life
movers building permits
projections
Housing Road Map
key learnings
What would improve your housing situation?
Street Im-provements
Improved Drainage Community Cleanup
Curb & Gutter0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
RentOwn
infrastructure
% o
f Tho
se W
ho R
espo
nded
affordability
renters
homes for sale
infrastructure
quality of life
movers building permits
projections
Housing Road Map
key learnings
Supply and Projected Demand of Housing
We wanted to know if the number of homes being sold on the
market per year (i.e. supply) would meet the
projected demand of homes-for-sale needed given
the number of people who wanted to build or purchase a
home within two years.
So, we crunched a few numbers, and…
homes for sale
…We found the total number of those who hope to build or purchase a home in Clear Lake in the next 2 years. (18)
Then took this total for 2 years (18) and divided it by 2 to get the
total number per year. (9)
To find out the projected total for the Clear Lake population,
we took 9 x 3.1 (extrapolation for Clear Lake…but we’ll go over that later…) (28)
The final number of homes needed turned out to be 28. We then
compared this to the average number of homes sold per year in
Clear Lake in the past 5 years…
homes for sale
Comparison to Actual Homes for Sale in Clear Lake
05
1015202530
2528
homes for sale
Open Market Home Sales from 2004 - 2008
We also looked at historical home sales in Deuel County
within the last 5 years. All home sales we considered
were open market sales (by realtor, for sale by owner,
or auction) & fit within three categories:
• Clear Lake homes for sale.
• Rural Town within city limits of any other community.
• Acreages within 3 – 30 acres, anywhere in Deuel.
homes for sale
Open Market Home Sales
homes for sale
?What is an open market home sale?• Home for sale is available to public • May be sold by owner, auction, or realtor• Non-open market home sale would be a sale
not open to the public. For example, this could be a sale between relatives or a transfer of property.
History of Open Market Home Sales 2005 – 2008
Clear Lake Rural Towns Acreages0
5
10
15
20
25
30
2004
2005
2006
2007
2008
homes for sale
Absorption Rate
homes for sale
Absorption rate: number of weeks it takes to sell the current inventory at the present rate of sales
Absorption rate formula (Clear Lake)# listings on market= 14# sold last month= 1# sold (1) x 12 months= 12
divide 12/52 weeks = .23 units per weekDivide .23 units per week into 14 (number of active listings)
14/.23= 60.9
60.9 weeks is Absorption Rate
Cost of Open Market Homes Sold from 2004 – 2008
homes for sale
$20,000 and under
$20,000-$30,000
$30,000-$40,000
$40,000-$50,000
$50,000-$60,000
$60,000-$70,000
$70,000-$80,000
$80,000-$90,000
$90,000-$100,000
$100,000-$120,000
$120,000-$150,000
$150,000+0
2
4
6
8
10
12
14
20042005200620072008
# H
omes
Sol
d
Comparison to other communities for 2007-2008Price of Home
homes for sale
$20,000 and under
$20,000-$30,000
$30,000-$40,000
$40,000-$50,000
$50,000-$60,000
$60,000-$70,000
$70,000-$80,000
$80,000-$90,000
$90,000-$100,000
$100,000-$120,000
$120,000-$150,000
$150,000+0
1
2
3
4
5
6
7
8
9
10
Clear LakeClarkDeSmet
Age of Homes Sold in Deuel County
homes for sale
Before 1900
1901-1920
1921-1940
1941-1960
1961-1980
1981-2000
After 2000
0
2
4
6
8
10
12
14
16
18
20042005200620072008
# H
omes
Sol
d
Year Home was Built
Comparison to other communities for 2007-2008Age of Home
Before 1900
1901-1920
1921-1940
1941-1960
1961-1980
1981-2000
After 2000
0
5
10
15
20
25
30
Deuel CountyClark County
homes for sale
Rehab Opportunities: Purchase-Rehab-Resell
homes for sale
A few ideas:• Older lower price homes that are in need of
improvements are good candidates for a Purchase-Rehab-Resell (P-R-R) program.
• Purchase-Rehab-Resell more likely to reach the ‘affordable’ market than new construction.
• ICAP offers an income-based program for homeowners to Rehab their homes.
• How much needs to be invested in these homes for rehab?
• We could potentially raise funds for P-R-R (keeping in mind that money is likely to be lost or break even)
...
Clear Lake has affordable homes!
homes for sale
• Seems as though there is the perception in Clear Lake that there aren’t many affordable homes on the market.
• But… the data shows that there are…• What is it about this that people are not
considering this affordable homes?• Average age of homes (2000 census) which is
10 years old...
Compare to expectations…
homes for sale
So… If there are affordable homes on the market in Clear Lake, why is there a perception that there aren’t any?
• Is it that the homes aren’t meeting peoples’ expectations?
• Is that why homes have not been considered affordable??
affordability
renters
homes for sale
infrastructure
quality of life
movers building permits
projections
Housing Road Map
key learnings
Now… to extrapolate the data
Next we ‘extrapolated’ the data to look at the numbers as if the
survey results were applied to the entire population of Clear Lake.
Extrapolating looks at the data on a community-wide level. Your guess is as good as ours if 32% of the people in Clear
Lake would be representative of the entire population.
So here we go…projections
Here’s how we did it…
428 Sample Size (Survey Respondents)
1335 Clear Lake Population
3.1 yield ratio (1335/428 = 3.1)
Multiply 3.1x data = extrapolation value
projections
Current renters who hope to move Based on this extrapolation, there are 279 current renters and 103 hope to move. 47 hope to own a home within 2 years.
Of 47 who plan to own, 37 hope this home is in Deuel County.
projections
Rent a Home Rent an Apt/Complex
Pur/Bld Starter Pur/Bld Move-Up0
5
10
15
20
25
30
35
40
810 11
4
25
3134
13
SampleTotal Population
30% 33% 12%24%# of
cur
rent
rent
ers
who
hop
e to
mov
e
Type of home
Hoping to move out of Deuel CountyBased on this extrapolation, those who
hope to move out of Deuel County currently live in…
Clear Lake Acreage in Deuel Other Rural Town0
5
10
15
20
25
30
35
40
45
16
3 3
40
8 8
SampleTotal Population
13% 13%67%
projections
# of
thos
e w
ho h
ope
to m
ove
out o
f Deu
el
Current Residence Location
Move to locationBased on this extrapolation, here are the locations they hope to move to…
Clear Lake Out of Deuel Acreage in Deuel Other Rural Town0
10
20
30
40
50
60
70
24 2421
9
60 60
53
23
SampleTotal Population
31% 27%31% 12%
projectionsHope to Move Location
# of
peo
ple
who
hop
e to
mov
e
Commuters interested in living in Deuel CountyBased on this correlation, those who live out of Deuel County, but want
to move into Deuel County would like to live in...
Clear Lake Other Rural Town Acreage in Deuel County
0
2
4
6
8
10
12
14
5
4
2
13
10
5
SampleTotal Population
45% 36% 18%
projectionsHope to Move Location
# of
peo
ple
who
hop
e to
mov
e
Preferred housing types in Clear LakeBased on this correlation, here are the preferred housing types for
those who hope to move to Clear Lake…
MoveUp Home Starter Home0
5
10
15
20
25
7
9
18
23
SampleTotal Population
56%44%
projectionsPreferred Housing Type
# of
peo
ple
who
hop
e to
mov
e
Projecting the housing need in Clear Lake…
The following are projections of the future housing need in Clear Lake.
These projections are based off of the 2000 Census and actual population growth in Clear Lake since 1950.
Since 1950, Clear Lake’s growth rate averages 4% per decade, which translates to an increase of .4% per year.
projections
Projecting the housing need in Clear Lake…
Based on the historical growth rate of .4% per year, we estimated future
housing growth needs for the next 10 – 12 years (until 2020).
These projections look at the number of housing units needed to accommodate
population growth in Clear Lake. The need is shown on a
household basis rather than total housing units, as this will provide a more
accurate picture for housing unit demand. In 2020 the average household size is projected to be 2.1.
Based on these factors, here’s what Clear Lake’s projected housing need looks like…projections
Clear Lake’s Projected Need for Single Family Homes until 2020Total Owner Occupied: 50 Units (=24 households)
Affordable-Low ($60,000-90,000)
Moderate ($90,000-125,000)
Moderate Market ($125,000-175,000)
Executive/Move-Up ($175,000+)
0
1
2
3
4
5
6
7
8
9
10
7
9
6
2
projections
# of
Uni
ts
Price Level of Homes Needed
Clear Lake’s Projected Need for Single Family Homes until 2020, continued…
projections
...This graph shows the Clear Lake’s additional
housing need until 2020 to be…
Fewer than 1 additional home per year per category, and…
A total of 2 – 3 additional homes per year.
Clear Lake’s Projected Need for Rental Units until 2020Total Renter Occupied: 20 (=9 households)
Subsidized (Less than $300)
Affordable ($300-500)
Market ($500+)
0
0.5
1
1.5
2
2.5
3
3.5
3 3 3
projections
# of
Uni
ts
Rent Payment Threshold
affordability
renters
homes for sale
infrastructure
quality of life
movers building permits
projections
Housing Road Map
key learnings
key learnings
#1 Healthy Housing Market
#2 The Affordability Reality
#3 Let’s Get Resourceful
#4 Down Payments are an Obstacle
#5 Turn Faces Into Neighbors
#6 Invest in Ourselves First
Housing Programs
Here are some housing programs available through State (South
Dakota Housing Development Authority) and Federal sources.
Nearly all of these programs cater to very-low income, low-income, elderly, and disabled persons, which makes community investment even more probable if our housing needs do not fit within these programs.
resources
Single Family Housing Programs (South Dakota Housing Development Authority)
First Time Homebuyer – Provides low-interest loans to first-time homebuyers.
Mortgage Assistance Program – Provides down payment and closing cost financing assistance to qualified mortgagors. In the form of a second mortgage to homebuyers employed with a participating employer. Loan amounts: $600 – 6,000 depending on household income.
Loan Assistance Program – Provides down payment, closing cost, and gap financing in connection with a home purchase financed by a 1st mortgage loan through a participating lender . (SDHDA)
resources
Community Home Improvement Program – Provides low-interest loans for income eligible borrowers to improve or repair borrower’s present single family home. Interest rates are: • 1.9% (max income $28,750)• 3.9% (max income $46,000)• 5.9% (max income $54,625)
resources
Single Family Housing Programs, cont. (South Dakota Housing Development Authority)
Multifamily Housing ProgramsLow Income Housing Tax Credit Program – Provides incentives for
private developers to develop and maintain rental housing for low income renters. Tax credits offer a reduction in federal tax liability to owners/investors in eligible low income new construction, rehab, or existing housing development. (SDHDA)
Multifamily Bond Financing Program – Provides sponsors of selected multifamily housing developments with mortgage loans through the sale of tax-exempt or taxable revenue bonds. Developers apply to SDHDA for financing of new construction or acquisition and rehab of rental properties. (SDHDA)
resources
HOME Programs (Multifamily)HOME Program – Designed to expand the supply of decent, safe, sanitary
and affordable housing for very-low and low-income households as determined by income limits. Provides funds to developers/owners for acquisition, new construction, and rehab of affordable housing, second mortgages, and down payment assistance. Typical financing package:• 10% owner equity• 40% conventional loan• 50% HOME funds
Other considerations:• Primarily multi-family housing, restricted to 80% of AMI by household size• Must start home constructions within 12 months of site development• Restrictions to keep resale of homes ‘affordable’ for 15 years.
resources
Federal Home Loan Bank – Affordable Housing Program
FHLB – 12 regional cooperative banks (ours is the Federal Home Loan Bank of Des Moines) created by Congress to finance community housing and economic development. Local lenders are members of the FHLBank System.
Affordable Housing Program (AHP) – Member banks partner with developers and community organizations seeking to build and renovate housing for low- to moderate-income households. Programs cater to seniors, disabled persons, homeless, and first-time homebuyers. Activities include:• Site improvements• Acquisition• Purchase / rehab for sale• Below market-rate loans to members with long-term financing
Funds used in combination with other funding sources such as the Low-Income Housing Tax Credits and Community Development Block Grant.
resources
Community Development Block GrantCommunity Development Block Grant (CDBG) is not often used in South Dakota
for housing development, but there may be a slight possibility if used for infrastructure only.
CDBG – HUD Program works to ensure decent affordable housing. An annual CDBG appropriation is allocated to States through “entitlement” jurisdictions (metropolitan areas), entitlement jurisdictions then distribute CDBG funds to other communities. The process works like this:
• HUD determines the amount of each grant by community need, population, age of housing, population growth lag in relationship to other metropolitan communities.
• Over a 1, 2 or 3 year period, no less than 70% of the funds must be used for activities that benefit low- and moderate-income persons, prevention of slums or blight, or address other urgent community development needs that pose a serious threat to the health or welfare of the community for which funding is not available.
resources
Wells Fargo Homeownership Grant Program
Wells Fargo Home Ownership Grant Program – The Wells Fargo Housing Foundation Mission is to provide sustainable homeownership opportunities for low-to moderate income people. The Grant Program provides financial resources to nonprofit local housing organzations to create sustainable homeownership opportunities for low- to moderate-income people. Wells Fargo Grant Program covers the following activities:
• Construction / Rehab for the development and redevelopment of construction or rehab of owner-occupied homes
• Homebuyer education, counseling, and prevention• Subsidies for down payment and closing costs, interest rate buy downs and other
susbsidies that help homebuyers purchase a home• Essential home repairs, purchases and modifications
Applications are reviewed 3x/year
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Rural Site Development ProgramsRural Site Development Programs can be used to stimulate the development of
new affordable housing subdivisions in rural communities.
SDHDA: Rural Site Development Loan• SDHDA partners with local bank for 50% of the loan (local lender needed, must
evidence to lender how project will cash-flow)• 1/3 of the homes need to sell at the ‘affordable’ price ($160,000 for house, lot)• Loans cover infrastructure development
USDA Rural Development: Rural Housing Site Loan Program• Site development loans bust be paid off in 2 years, or when lots are sold• Loans cover infrastructure development
resources
Tax Increment Financing (TIF)Tax Increment Financing is one way to help finance rural housing
and site development. Tax ‘increment’ is the improvement made to the property (i.e. sewer,
streets, etc). These improvements are taxes as per normal by the City, but instead of being considered as City revenue, the tax value goes to servicing the bond/financing for the cost of the improvements.
Projects must be completed in 5 years Challenges:
• Finding a local lender• Generating & showing cash-flow• Lots need to move fast so that a large enough increment is generated
to pay off the cost of the infrastructure.
resources
Self-Help Mutual HousingSelf-Help Mutual Housing is a program offered through ICAP and
USDA Rural Development to get income eligible families into home ownership.
• A.K.A. ‘Sweat Equity’ housing – a minimum of 3 local income eligible families must be identified to qualify for a project.
• ICAP hires a contractor, and the families work together to build their homes.• No labor cost results in great savings for new housing construction for the
homeowner, and valuable skills are learned throughout the process.• In a recent project in Brookings, cost to the home owner was approx. $95,000,
and assessed value of the home was approx. $135,000 – homeowner receives this equity.
resources
USDA Rural Development ProgramsGuaranteed Rural Housing Loans – 100% home financing for qualified low- and
moderate-income eligible individuals.Home Ownership Loans – Homeownership loan funds that may be used to buy,
build, improve, repair, or rehab rural homes to provide adequate water and waste disposal systems. Funds may also be used to modernize homes (add bathrooms, central heating, kitchens, etc). Eligible for low- to moderate-income eligible families.
Section 504 Rural Home Repair Loans and Grants – loans/grants restricted to very low-income individuals to modernize and improve home (grants eligible for income eligible people 62 years of age & higher.
Section 538 Guranteed Rural Rental Housing Loans – loans to organizations intending to produce new affordable rental housing by inviting qualified lenders and eligible housing providers to propose rental complexes that will serve rural residents with low- and moderate-incomes.
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HUD ProgramsHUD Section 202 Program – Provides capital advance to non-profit
developers for development of elderly housing for either independent living or congregate (frail elderly) living. The program provides 100% financing, with a capital advance, no repayment loan and operational subsidy as long as it serves very-low income elderly for 40 years.
HUD Section 811 Program – Provides a capital advance to non-profit developers for the development of housing for persons with disabilities. 100% financing with an operational subsidy. Also provides rental assistance.
resources
Paint-South Dakota
Paint-South Dakota is a program offered through the SDHDA (South Dakota Housing Development Authority)
• SDHDA will purchase the paint and primer needed• The selected parties will need to provide a volunteer group to
perform labor and organize equipment to paint the house.
• Guidelines for the program include…– The home must be a single family, owner-occupied residence
in need of painting– The owner should be physically or financially unable to paint
their home.
Come on, you know you have a question!Raise that hand!
questions?
Looking at existing housing stock in Clear Lake…
windshield survey
Deuel County demographic information… everything you might want to know!
demographics
MCDC Demographic Profile 3 Trend Report, 1990 - 2000
Deuel County , SD 46039 Usage Notes Complete metadata(pdf): 1990 2000
Subject 2000 1990 Change
Notes Number Pct. Number Pct. Number Pct.
1. Population Basics Universe: Total Population Metadata: 1990 2000
Total Persons (Sample Est) 4,498 4,522 -24 -0.5
Unweighted Sample Count of Persons 2,159 1,836 323 17.6
Total Persons (100% Count) 4,498 4,522 -24 -0.5
Pct Persons Sampled 48.0 40.6 7.4
Urban Population 0 0.0 0 0.0 0 0.0
In Urbanized Areas 0 0.0 0 0.0 0 0.0
Rural Population 4,498 100.0 4,522 100.0 -24 0.0
Persons on Farms 1,102 24.5 1,306 28.9 -204 -4.4
Persons Per Sq Mile 7.2 7.3 -0.0 -0.5
2. Age Universe: Total Population Metadata: 1990 2000
Under 5 259 5.8 316 7.0 -57 -1.2
Age 5 to 9 296 6.6 360 8.0 -64 -1.4
10 to 14 363 8.1 309 6.8 54 1.2
15 to 17 225 5.0 231 5.1 -6 -0.1
18 to 19 110 2.4 82 1.8 28 0.6
20 to 24 151 3.4 151 3.3 0 0.0
25 to 34 453 10.1 601 13.3 -148 -3.2
35 to 44 698 15.5 537 11.9 161 3.6
45 to 54 570 12.7 487 10.8 83 1.9
55 to 59 207 4.6 235 5.2 -28 -0.6
60 to 64 239 5.3 276 6.1 -37 -0.8
65 to 74 465 10.3 480 10.6 -15 -0.3
75 to 84 325 7.2 320 7.1 5 0.1
Over 85 137 3.0 137 3.0 0 0.0
Under 18 1,143 25.4 1,216 26.9 -73 -1.5
Over 18 3,355 74.6 3,306 73.1 49 1.5
18 to 64 2,428 54.0 2,369 52.4 59 1.6
Over 21 3,211 71.4 3,208 70.9 3 0.4
the survey document
the raw data
Thanks to ITC for help with survey development and data analysis! Thank you, Jeff Rogers!
